Why Chrysler Group LLC Is Thriving One Year After Chapter 11 Bankruptcy

When Chrysler emerged from Chapter 11 bankruptcy in June 2009 as the Chrysler Group LLC, it knew that it had to totally remake its business in order to thrive post-bankruptcy.  And that’s exactly what they did creating great results.  And it is the type of results which Chrysler achieved that is the reason why so many troubled companies turn to bankruptcy to not only save their business but to infuse it with opportunities which might not have been possible outside of bankruptcy.

Let’s take a look at some of the things Chrysler was able to accomplish with the help of bankruptcy:

  • After emerging from Chapter 11 bankruptcy, Chrysler’s sales increased so much that it had six consecutive months of market share growth.  That type of growth silences bankruptcy dissenters who claim that a bankruptcy filing is the death wish of companies. For Chrysler it has been quite the opposite.
  • After emerging from Chapter 11 bankruptcy Chrysler was able to improve the quality of its vehicles and creating new vehicles which it hadn’t done in years.  Because of a heavy debt-load before bankruptcy, the company became stagnant, its cars not changing or improving.  By freeing up their income in Chapter 11 bankruptcy Chrysler was able to invest in their future by building better cars, which eventually enabled them to drop promotions allowing them to increase their profits.
  • At the height of the auto industry meltdown Chrysler had a 120 day backlog of vehicle inventory, but after bankruptcy they now only have a backlog of only 60 days and we’re still in a recession.  That’s a 50 percent reduction in inventory made possible by bankruptcy.